Supply network centrality and ESG performance: A resource dependence perspective

In this study, we examine the relationship between a firm's social capital measured by its centrality in the supply network and its environmental, social, and governance (ESG) performance. Using data from China's A-share firms, we apply resource dependence theory and show a negative correlation between in-degree centrality and ESG performance. Specifically, firms with greater social capital from suppliers tend to allocate fewer resources for enhancing ESG performance, especially when facing financial constraints or low investor protection, or if state-owned enterprises. This study enriches the ESG literature by integrating network-based variables and provides valuable insights into sustainable performance within supply networks.